NOTE: Sephiroth has 1800 HP.
I don't think you have to be a too high a level to defeat him (about
80 or so). I was level 100, but I chose the staff and the shield in
'Dive into the Heart' (at the start of the game). Anyway, equip Strike
Raid, MP Rage and the Oblivion keychain (found in Hollow Bastion in
the chamber where you fight Riku for the second time). Okay, during
the battle cast Aeroga (if you have it) immediately. Then just keep
striking him normally and healing when your HP is low. When he uses
the move 'Sin Harvest' use Strike Raid if he is far away or strike
normally if he is close and this should get him before he affects you.
If not, use a Hi-Potion and then each time he strikes you your MP
should be restored (from MP Rage) slightly for you to use a curative
spell (preferably Curaga - get it from Aerith in Hollow Bastion after
sealing the keyhole there, talk to her a few times.) He will stop
using Sin Harvest when you get him down to low enough health and will
do a few other moves. Before he uses meteor, make sure Aeroga is cast.
From hereon, just strike him until he dies, basically.